Legislature(2019 - 2020)BELTZ 105 (TSBldg)

03/25/2020 01:30 PM LABOR & COMMERCE

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Audio Topic
01:32:08 PM Start
01:33:06 PM Confirmation Hearing(s)
01:44:08 PM HB232
02:00:41 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Meeting Postponed from 3/24 at 1:30 p.m. --
+ Consideration of Governor's Appointees: TELECONFERENCED
Board of Massage Therapists - Kristin Tri
Labor Relations Agency - Patty Burley
Board of Certified Real Estate Appraisers
- Wendy Lawrence
Real Estate Commission - Samuel Goldman
Board of Professional Counselors - Laura Patin
*+ HB 301 ELECTRICIAN & PLUMBER APPRENTICESHIPS TELECONFERENCED
Scheduled but Not Heard
Uniform Rule 23 Waived
+ HB 232 MUNICIPAL TAX CREDITS TELECONFERENCED
Moved CSHB 232(L&C) Out of Committee
-- Public Testimony --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HB 232-MUNICIPAL TAX CREDITS                                                                              
                                                                                                                                
1:44:08 PM                                                                                                                    
CHAIR BISHOP  announced the  consideration of  CS FOR  HOUSE BILL                                                               
NO.  232(L&C),  "An  Act  relating to  a  municipal  air  quality                                                               
improvement  tax  credit;  and  relating to  a  municipal  energy                                                               
efficient construction tax credit."                                                                                             
                                                                                                                                
1:44:39 PM                                                                                                                    
REPRESENTATIVE GRIER HOPKINS, Chair, House Labor & Commerce,                                                                    
Alaska State Legislature, Juneau, Alaska, introduced HB 232                                                                     
paraphrasing the sponsor statement.                                                                                             
                                                                                                                                
     Introduced at  the request of the  Fairbanks North Star                                                                    
     Borough,  HB  232  gives municipalities  new  tools  to                                                                    
     address   challenges  facing   their  communities   and                                                                    
     stimulate   local  economies.   HB  232   allows  local                                                                    
     governments  to offer  municipal tax  credits for  home                                                                    
     and   business   owners    who   invest   in   property                                                                    
     improvements   which   result   in   increased   energy                                                                    
     efficiency  or improve  local  air  quality. This  bill                                                                    
     does  not mandate  any action  by  municipalities    it                                                                    
     offers   local  governments   additional  avenues   for                                                                    
     addressing local challenges  and priorities and creates                                                                    
     partnerships  with local  businesses  to stimulate  and                                                                    
     diversify local economies.                                                                                                 
                                                                                                                                
     Relying  on  the adage  that  local  problems are  best                                                                    
     solved   through  local   solutions,   HB  232   allows                                                                    
     municipal  tax  credits  to  be  targeted  towards  new                                                                    
     construction   that    results   in    overall   energy                                                                    
     efficiency.     Additionally,    the     bill    allows                                                                    
     municipalities  facing chronic  air  quality issues  to                                                                    
     offer tax credits to businesses  and residents who make                                                                    
     investments that  will result  in a reduction  in PM2.5                                                                    
     pollution.                                                                                                                 
                                                                                                                                
     It  is  the hope  of  the  sponsor and  the  requesting                                                                    
     municipality  that  these  tools will  result  in  more                                                                    
     Interior  Alaskans  choosing   to  convert  their  home                                                                    
     heating systems  and connect to the  expanding Interior                                                                    
     Gas  Utility,  thereby  maximizing the  return  on  the                                                                    
     state's  investment   in  the  system.   An  additional                                                                    
     benefit of  this legislation  will be  streamlining the                                                                    
     efforts  of the  Fairbanks North  Star Borough  and the                                                                    
     Department of Environmental  Conservation on to improve                                                                    
     air quality in Interior Alaska.                                                                                            
                                                                                                                                
     The   bill   allows    for   maximum   flexibility   by                                                                    
     municipalities  who  choose  to  offer  these  credits,                                                                    
     avoiding a  "top down" approach  to local  issues. This                                                                    
     simple  "no harm"  bill  will  foster new  partnerships                                                                    
     with  local  contractors,  businesses  and  homeowners.                                                                    
     Unleashing  local creativity  is critically  important,                                                                    
     allowing  local governments  to  harness  the power  of                                                                    
     private  enterprise and  address  local challenges  and                                                                    
     priorities where most effective and appropriate.                                                                           
                                                                                                                                
He advised that the bill has a zero fiscal note.                                                                                
                                                                                                                                
1:46:59 PM                                                                                                                    
REPRESENTATIVE  HOPKINS said  HB  232 is  necessary because  some                                                               
classes  of  municipalities  cannot   put  forward  property  tax                                                               
credits unless they  have statutory authority to do  so. He would                                                               
like all municipalities to have this  option. He said the bill is                                                               
supported  by  the Alaska  Municipal  League,  the Alaska  Miners                                                               
Association,  the  Alaska  State  Homebuilders  Association,  the                                                               
Usibelli  Coal  Mine, Aurora  Energy,  the  Fairbanks North  Star                                                               
Borough, the Interior  Gas Utility, and the  Cold Climate Housing                                                               
Research Center.  He said that the  bill was a good  idea when it                                                               
was initially  introduced, but  it is  even more  important today                                                               
with the current economic situation.  He said he envisioned local                                                               
government would work to implement  tax credits to help put small                                                               
construction businesses  back to  work as  this crisis  begins to                                                               
pass. People  can order almost  anything online, but  they cannot                                                               
order an electrician  from Amazon or a local  contractor on eBay.                                                               
These   tax  credits   will  provide   another  tool   for  local                                                               
governments to use to incentivize  Alaskans to keep their dollars                                                               
local and help  small businesses and homeowners.  This tax credit                                                               
would be  available for commercial and  residential construction.                                                               
New buildings  with lower costs,  structured in ways that  do not                                                               
impact the  revenue streams of  cash strapped  municipalities. It                                                               
will help  banks keep  money moving,  help new  construction, and                                                               
provide improvements that  do not cost the  state or municipality                                                               
any money.                                                                                                                      
                                                                                                                                
1:49:14 PM                                                                                                                    
REPRESENTATIVE   HOPKINS   delivered  the   following   sectional                                                               
analysis for HB 232:                                                                                                            
                                                                                                                                
     Section 1:  Amends 29.45 to  reinstate the  Air Quality                                                                    
     Improvement Tax  Credit which  sunsetted in  2016. This                                                                    
     section applies  only to  local governments  with areas                                                                    
     failing   to  meet   federal  or   state  air   quality                                                                    
     standards.  Improvements must  have  been  made in  the                                                                    
     preceding   tax  year.   The   municipality  shall   be                                                                    
     responsible    for    developing    and    implementing                                                                    
     eligibility standards and other criteria.                                                                                  
                                                                                                                                
1:49:42 PM                                                                                                                    
     Section 2: Amends 29.45 to  create the Energy Efficient                                                                    
     New  Construction Tax  Credit, allowing  municipalities                                                                    
     across  the  state to  offer  property  tax credits  to                                                                    
     offset the  cost of  new energy  efficient construction                                                                    
     in  the  prior  tax year.  Municipalities  choosing  to                                                                    
     participate  in this  tax credit  shall be  responsible                                                                    
     for developing  and implementing  eligibility standards                                                                    
     and other criteria.                                                                                                        
                                                                                                                                
1:50:15 PM                                                                                                                    
SENATOR STEVENS  questioned the  necessity of  the bill.  He said                                                               
this  is   about  local   property  taxes   and  it   seems  that                                                               
municipalities  would have  the right  to use  property taxes  to                                                               
offer tax credits if that was  their desire. He asked if that was                                                               
incorrect.                                                                                                                      
                                                                                                                                
REPRESENTATIVE HOPKINS  explained that  the Fairbanks  North Star                                                               
Borough  does  not have  the  authority  to implement  these  tax                                                               
credits. First  class and  home rule  cities have  the authority,                                                               
but  second  class  boroughs  do not  have  that  authority.  The                                                               
authority  must  be  in  statute for  the  Fairbanks  North  Star                                                               
Borough to  implement the  tax credits. It  would be  helpful for                                                               
the local Interior gas utility this spring, he said.                                                                            
                                                                                                                                
SENATOR STEVENS summarized the answer.                                                                                          
                                                                                                                                
1:51:49 PM                                                                                                                    
SENATOR  REVAK   said  he  liked   that  the   bill  incentivizes                                                               
businesses, does  not cost  the state  anything, and  assists the                                                               
Interior energy issue.                                                                                                          
                                                                                                                                
1:52:14 PM                                                                                                                    
SENATOR GRAY-JACKSON thanked him for bringing this forward.                                                                     
                                                                                                                                
1:52:28 PM                                                                                                                    
CHAIR BISHOP opened public testimony on HB 232.                                                                                 
                                                                                                                                
1:52:51 PM                                                                                                                    
BRITTANY SMART,  Special Assistant,  Mayor Bryce  Ward, Fairbanks                                                               
North Star Borough (FNSB), Fairbanks,  Alaska, stated that HB 232                                                               
will give the  FNSB the authority to establish  programs to issue                                                               
tax  credits.  It  will  incentivize   the  community,  help  the                                                               
construction  industry   be  more  energy  efficient,   and  help                                                               
projects that address air quality in the community.                                                                             
                                                                                                                                
1:53:41 PM                                                                                                                    
CHAIR  BISHOP  asked  if  the  borough  assembly  would  have  to                                                               
implement the credit, should this bill become law.                                                                              
                                                                                                                                
MS. SMART  answered yes;  the assembly  would ultimately  need to                                                               
authorize the tax credit program.                                                                                               
                                                                                                                                
1:54:17 PM                                                                                                                    
SENATOR STEVENS asked if the  borough could essentially provide a                                                               
tax credit by making an exception to who it taxed.                                                                              
                                                                                                                                
MS. SMART replied  she believes that the authority  to decide who                                                               
to tax  is limited in  scope, so  this legislation is  needed for                                                               
the borough to implement the tax credit program it is proposing.                                                                
                                                                                                                                
1:55:21 PM                                                                                                                    
AARON WELTERLEN,  Alaska State Home Building  Association (ASHA),                                                               
Fairbanks, Alaska, stated that both  ASHA and the Interior Alaska                                                               
Building  Association  fully  support   HB  232.  appreciate  the                                                               
committee hearing this bill. It  can incentivize construction and                                                               
provide  opportunities for  certain  projects to  be built.  This                                                               
legislation at  this uncertain time  provides hope for  a quicker                                                               
recovery.                                                                                                                       
                                                                                                                                
1:56:09 PM                                                                                                                    
CHAIR BISHOP  noted the conversations  they'd had since  the 2008                                                               
recession on  lending to  builders and suggested  he look  into a                                                               
bill on that point that is awaiting House concurrence.                                                                          
                                                                                                                                
MR.  WELTERLEN answered  that the  association was  following the                                                               
bill and  was interested  in what  it could do  to promote  a ust                                                               
housing market.                                                                                                                 
                                                                                                                                
1:58:01 PM                                                                                                                    
CHAIR BISHOP  said he  reviewed the letters  of support  and they                                                               
represent  a  great  cross  section of  the  Interior.  He  asked                                                               
Representative Hopkins  if there had been  any negative testimony                                                               
on the bill.                                                                                                                    
                                                                                                                                
REPRESENTATIVE HOPKINS  replied there  was initial  concern about                                                               
mandating action,  but the  bill would  only provide  the option.                                                               
Thus far  there has been no  opposition, he said. He  noted there                                                               
was  also interest  from  various Chambers  of  Commerce and  the                                                               
hospitality industry association.                                                                                               
                                                                                                                                
1:59:21 PM                                                                                                                    
CHAIR BISHOP  summarized that  the bill  provides an  option, 2nd                                                               
class  boroughs need  this  authority to  take  advantage of  the                                                               
option, and the package must be passed by the assembly.                                                                         
                                                                                                                                
REPRESENTATIVE HOPKINS agreed with the summary.                                                                                 
                                                                                                                                
CHAIR BISHOP  added that there is  no fiscal impact to  the state                                                               
treasury.                                                                                                                       
                                                                                                                                
2:00:05 PM                                                                                                                    
CHAIR BISHOP solicited a motion.                                                                                                
                                                                                                                                
2:00:07 PM                                                                                                                    
SENATOR STEVENS moved  to report HB 232,  work order 31-LS1355\E,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
CHAIR BISHOP  found no objection  and CSHB 232(L&C)  was reported                                                               
from the Senate Labor and Commerce Standing Committee.                                                                          

Document Name Date/Time Subjects
HB 301 Draft L&C CS ver. O.pdf SL&C 3/24/2020 1:30:00 PM
SL&C 3/25/2020 1:30:00 PM
SL&C 3/26/2020 1:30:00 PM
HB 301
HB 301 Public Comment received 03-24-20.pdf SL&C 3/24/2020 1:30:00 PM
SL&C 3/25/2020 1:30:00 PM
SL&C 3/26/2020 1:30:00 PM
HB 301
HB 232 Sponsor Statement.pdf SL&C 3/25/2020 1:30:00 PM
HB 232
HB 232 Sectional Analysis ver. E.pdf SL&C 3/25/2020 1:30:00 PM
HB 232
HB 232 Testimony Received by 3-25-2020.pdf SL&C 3/25/2020 1:30:00 PM
HB 232
L&C Massage Theraspists Tri #6.pdf SL&C 3/24/2020 1:30:00 PM
SL&C 3/25/2020 1:30:00 PM
Confirmations
L&C Real Estate Appraisers Lawrence #1.pdf SL&C 3/24/2020 1:30:00 PM
SL&C 3/25/2020 1:30:00 PM
Confirmations
L&C Professional Counselors Patin #2.pdf SL&C 3/24/2020 1:30:00 PM
SL&C 3/25/2020 1:30:00 PM
Confirmations
L&C Labor Relations Agency Burley #6.pdf SL&C 3/24/2020 1:30:00 PM
SL&C 3/25/2020 1:30:00 PM
Confirmations